Accounting Equation

Question 1

How do you find the Asset value using the accounting equation?

Answer 1

Owner’s Equity + Liabilities = A

Question 2

How do you find the Liability value using the accounting equation?

Answer 2

Asset - Owner’s Equity = L

Question 3

How do you find the Owner’s Equity value using the accounting equation?

Answer 3

Asset - Liability = OE

Question 4

Assets = $18,060
OE = $17,000
What is the Liability?

Answer 4

$18,060 - $17,000 = $1,060

Question 5

Assets = $42,000
Liability = $12,000
What is the OE Value?

Answer 5

42,000 - 12,000 = $30,000

Question 6

Liabilities = $400
OE = $9,100
What is the Asset Value?

Answer 6

$400 + $9,100 = $9,500

Question 7

What would be the owner’s investment in this business?
Assets
	Cash at Bank	$    2 500
	Accounts Receivable	100
	Inventories	8 000
	Motor Vehicle	10 000
Liabilities
	Accounts Payable	$    3 400

Answer 7

Asset - Liability = OE

$20,600 - $3,400 = $17,200